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Small and Medium Enterprise Agency Basic Policies for Future-oriented Trade Practices Released

On September 15, 2016, Mr. Hiroshige Seko, Minister of Economy, Trade and Industry, released “Basic Policies for Future-oriented Trade Practices,” aiming to promote fair trade between or improve added value for both main subcontracting enterprises and subcontractors and to further enhance trade environments across whole supply chains.

1. Summary of the request to the industrial world

On September 15, 2016, at the social gathering with Keidanren (Japan Business Federation) and the Japan Automobile Manufacturers Association, Inc. (JAMA), Minister Seko released the Basic Policies for Future-oriented Trade Practices.

Based on these policies, Minister Seko requested that JAMA formulate a voluntary-based action plan for the promotion of fair trade in the automobile industry and facilitate leading efforts for improving added value in the industry. In response, Mr. Hiroto Saikawa, president of JAMA, mentioned that JAMA will formulate such action plan.

The Small and Medium Enterprise Agency (SMEA) will continue to request industrial associations and other organizations, having constructed broad subcontracting structures, to formulate voluntary-based action plans toward the further introduction of fair trade and the improvement of added value across whole supply chains.

2. Details of the measures for the policies

  1. Strictly dealing with inappropriate actions by main subcontracting enterprises and realizing fair trade environments
  2. Disseminating and establishing desirable trade practices and other actions contributing to fair trade and improvement of added value for both main subcontracting enterprises and subcontractors
  3. Making efforts for improving trade environments across whole supply chains and developing environments favorable for wage hikes

Based on the three basic policies above, SEMA will strive to conduct thorough measures to prevent main subcontracting enterprises from enforcing their subcontractors to pay expenses that the main subcontracting enterprises are required to bear, focusing on the three challenges: making price setting methods more appropriate, making cost-burden practices more appropriate, and improving terms of payment.

Specifically, SEMA will stipulate more specific rules effective across sectors and strictly enforce them, e.g., revising the operation standards under the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors and the promotion standards under the Law on the Promotion of Subcontracting Small and Medium Enterprises.external link In parallel with this, it will also request industrial associations to formulate voluntary-based action plans toward the further introduction of fair trade and the improvement of added value across whole supply chains and to ensure the plans are carried out.

Release date

September 15, 2016

Divisions in Charge

  • Information on the measures in general: Fair Trade Division, SMEA
  • Information on the actions by sector: Manufacturing Industries Bureau, METI
Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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